Russia... Increase in Oil and Gas Revenues in February

Data from the Russian Ministry of Finance showed today, Friday, that "oil and gas revenues, which are the main support for the state treasury, rose by 22.5 percent in February, but decreased by 46.4 percent compared to the same month last year." Revenues from taxes and customs on oil and gas sales in January fell to their lowest level since August 2020. Moscow relies on energy revenues, which were about 11.6 trillion rubles (154 billion dollars) last year, to finance government spending and has had to sell foreign reserves to cover a deficit that grew due to its military operation in Ukraine. Revenues from oil and gas sales contributed approximately 521.2 billion rubles to the budget last month, compared to 425.5 billion in January and 971.7 billion in February 2022. The ministry stated on Wednesday that it "set the reference price for Urals crude oil at 49.56 dollars per barrel in February, slightly higher than the price of 49.48 dollars per barrel set in January. However, this is significantly lower than the price set in February 2022 at 77.16 dollars." The Russian budget deficit is expected to reach two percent of GDP this year, and any additional deficit will require Russia to increase its foreign currency sales and cut spending, expand borrowing, or impose more taxes.